Bleach,Inc.

The proportion of net sales through R Co., Ltd. remained high at 47.1% in FY2024 (ended June 2024) and 37.8% in FY2025 (ended June 2025). The main products supported through this channel are concentrated in hair growth agents, beauty serums, and foods with function claims of a specific major corporate group, and any changes in that group's business strategy or shifts in consumer trends could directly impact the Group's financial position and operating results. Although the Group is focusing on expanding its product portfolio, it will take time to reduce this dependency.

The Group's revenue is generated under a revenue-share structure that only arises when sales are recorded at client companies; if marketing results are not achieved, no net sales arise. The Group manages this risk through accumulation of marketing know-how, strengthening of hiring and training, and establishment of cost-cutting rules, but if these measures fail to function, growth rates of sales and profit could decline. This risk is fundamental to the business model, and its impact is explicitly stated as significant in the Annual Securities Report.

The advertising industry has seen successive introductions of new technologies and services, with rapid technological change accompanying the proliferation of devices such as smartphones and tablets. While the Group is focusing on strengthening personnel development and acquiring marketing technologies and know-how, delayed response could lead to a decline in service quality and competitiveness, as well as increased spending on systems and personnel costs to address new technologies, potentially reducing profitability.

The Group's business model requires upfront expenditure on marketing costs and tool/system implementation expenses, making upfront investment in working capital essential for continued growth. While the Group intends to continue such investment while weighing cost-effectiveness, if the upfront investment fails to produce the expected results or planned revenue is not achieved, this could affect operating results and financial position.

The Group conducts marketing using major advertising platforms such as LINE, Yahoo!, Google, Facebook, and TikTok, and changes to these platforms' terms of use or advertising algorithms directly affect the business. Although the Group has established an information-gathering framework, delayed responses could affect business performance and financial position. High dependence on specific platforms creates a risk that specification changes at a single platform could spread to overall revenue.

The Group is directly regulated by the Telecommunications Business Act, the Pharmaceuticals and Medical Devices Act, medical advertising guidelines, and the Health Promotion Act, and also provides services to client companies while paying attention to compliance with the Act against Unjustifiable Premiums and Misleading Representations, among others. Future amendments to laws, enactment of new laws, changes in interpretation of existing laws, or introduction of industry self-regulation could constrain business operations. Since the products handled are concentrated in regulated categories such as hair growth agents, beauty serums, and foods with function claims, the Group is particularly susceptible to the effects of stricter regulation under the Pharmaceuticals and Medical Devices Act and the Act against Unjustifiable Premiums and Misleading Representations.

To address the risk of violating advertising-related laws such as the Act against Unjustifiable Premiums and Misleading Representations, the Pharmaceuticals and Medical Devices Act, the Health Promotion Act, and the Copyright Act, the Group has established its own advertisement review system that includes in-house staff checks as well as reviews by external attorneys and specialized institutions. However, if deficiencies occur due to unforeseen factors, such as advertisements being delivered before obtaining client approval, the Group may need to compensate clients for damages, which could affect its financial position and operating results.

The Group's greatest asset for growth is its human resources, and recruiting, developing, and retaining excellent marketers is positioned as a key growth strategy. Although the Group is strengthening new graduate and mid-career hiring and enhancing training programs, if it is unable to secure the necessary personnel due to changes in the labor market or increased workload from rapid business expansion, or if personnel development does not proceed as planned, this could affect the Group's financial position and operating results.

If a significant change occurs in the creditworthiness of a specific client company with which the Group continues large-scale transactions, this could disrupt cash flow and result in uncollectible bad debts. The Group sets credit limits for each individual sales destination and conducts appropriate credit and receivables management, recording allowances for doubtful accounts as necessary, but if this risk materializes, it could affect the Group's operating results and financial position.

The tradable share ratio at the end of the previous fiscal year was 24.7%, below the listing maintenance criteria for the Growth Market, but it reached 25.9% as of December 31, 2024, meeting the criteria. However, it remains close to the threshold, and if the tradable share ratio declines for any reason, this could lead to stagnation in market trading and adversely affect supply-demand balance. The Group is implementing initiatives to continuously improve its tradable share ratio.